demolition and removal of a structure may be treated as a
service rather than a public work.

This law applies to"
purchases of materials and supplies".
(38:2212A(1)(a))

this
includes equipment, vehicles and all other
movable property.

it
does not apply to services, professional or
otherwise, regardless of contract amount.

it
does not apply to pure leases of movables, but
does apply to any lease where there is an opportunity to obtain
title at any time.

it
does not apply to contracts for insurance, which
is considered a service.

it
does not apply to leases or purchases of real
estate for offices, warehouses, etc.

it
does not apply to purchases of materials, supplies or
services by the state, which are covered by the
Louisiana Procurement Code, R.S. 39:1551 and following.

The law becomes applicable when monetary "thresholds" are met for a
particular procurement.

for
public works the law becomes applicable when the
total cost of a project, including labor and materials,
exceeds $100,000.

public entities may undertake public works,
other than the construction of buildings, with their own employees
(force account) so long as the cost of the project does not exceed
the contract limit. R.S. 38:2212B. Please note that in computing
the “cost of the project” you must include the cost of
the materials, the value of all labor used in the project, the
value of owned equipment used in the project (using the rental
rates appearing in the latest edition of the Associated Equipment
Dealers Rental Rate Book) and administrative overhead.

special provisions apply to public works by political
subdivisions doing
utility work. See provisions in La. R.S.
38:2212E.

for
purchases of materials and supplies the law
requires the following.

for a purchase
below $7,500, no procedure is specified by state
law.

for a purchase
between $7,500 and $15,000, at least three telephone,
facsimile or written quotations must be obtained on the
same specification and documented in the file.

for a purchase
exceeding $15,000, the procurement must be advertised and
awarded based on sealed bids which are received
timely.

Contracts for materials, supplies, or equipment which will be
needed in partial deliveries through the fiscal year must be
purchased through a
"requirements" contract based on the estimated
total value of that commodity which will be purchased during the
fiscal year.

this will apply to acquisitions such as
office supplies, sand, gravel, gasoline, tires, auto
parts and all commodities needed in small but recurring
quantities during the fiscal year.

certain commodities with volatile prices, such as
gasoline, may require the use of an
index (such as OPIS) to establish a price which
adjusts with market conditions. "Cost Plus" contract arrangements
generally cannot be used in public procurement. A "percent off
catalogue price" bid may be used for items like auto parts and
office supplies.

Advertising of a bid solicitation is required once
a procurement meets the above bid thresholds.

advertising must appear in the local newspaper which serves
as the
official journal for your public entity.

specifications must be available on the date of the first
advertisement.

ad must indicate where the detailed specifications may be
obtained and
when and where bids will be received and
opened.

advertising for purchases must be published
at least twice, beginning at least 15 days
before bids are to be received.

advertising for public works must be published
at least three times:

beginning at least 30 days before bids are
to be received for projects
estimated by your licensed design professional to
cost over $500,000;

beginning at least 25 days before bids are
to be received for projects
estimated by your licensed design professional to
cost under $500,000;

advertising is the only notification requirement of the law,
but to encourage competition, specs and bid forms should be
mailed to all known area vendors of the commodities sought. Calls
or written notices to prospective contractors for public works
bids may help enhance your competition.

Contracts can be awarded in
emergency situations without advertising for
bids; notice of the declaration of an emergency must be
advertised in the official journal within 10
days after the declaration. See the strict definition of
emergency in R.S. 38:2211A(6).

Telecommunications and Data Processing equipment, software
and related services may be purchased either
by public bidding or by means of a Request for Proposals
(RFP).

advantages of a RFP

disadvantages of a RFP

The Public Bid Law gives great emphasis to the requirement that
open specifications be used in soliciting bids for
purchases or for public works. R.S. 38:2212F9(2) emphatically
provides:

Whenever in specifications the name of a certain brand, make,
manufacturer, or definite specification is utilized, the
specifications shall state clearly that they are used only to
denote the quality standard of product desired and that they do
not restrict bidders to the specific brand, make, manufacturer,
or specification named; that they are used only to set forth and
convey to prospective bidders the general style, type, character,
and quality of product desired; and that
equivalent products will be acceptable. It shall
be the responsibility of the professionally employed architect or
engineer to determine what is considered an equivalent product on
any and all projects in which he has been legally employed to
perform his professional services.

To this legislative mandate, our
Supreme Court has recently added:

In the area of product specifications, the emphasis in the
statutory language and the case law is on the quality of the
product or material. Under the Public Bid Law, a public entity is
allowed, subject to certain legislatively imposed restrictions,
to specify a particular quality of product desired.
A public entity may not impose a product specification
which suppresses competition by eliminating products of equal
quality. AGC v. Calcasieu Parish School Board, 586 So.2d
1354 (La. Sup. Ct. 1991). Emphasis added.

The number of
alternates allowed in specifications is limited to
three - no matter what these options are called. Alternates, if
accepted, must be accepted in the order listed on the bid form,
unless going out of order has no effect on determination of the low
bidder.

All public works contracts must authorize
Change Orders.

the Attorney General has taken the position that a delete
change order executed comtemporaneously with the contract may be
used to bring the low bid within funds available for the
project.

there is no dollar or percent limitation on the size of a
change order. Any change order must be “within the scope of
the contract”.

Opening of Bids must be done at the time and place
indicated in advertisement.

need not be done before the governing body unless required by
your local ordinances or procedures.

bids not received by the appointed time
cannot be considered and should not even be
opened; they should be marked with the time received and returned
to the bidder unopened.

sealed bids must be
publicly opened and read aloud, if
feasible.

bids are public records and are subject to
inspection and copying, but some precautions are suggested to
avoid tampering; the Public Records Law (R.S. 44:1-37) requires
availability within 72 hours of a written request.

no comment should be made at bid opening about the apparent
low bid or about bid award.

award and purchase order or contract document should be
entered only after careful review of apparent low bidder’s
responsibility and
responsiveness.

Waiving Informalities. The statute provides: "The
provisions and requirements of this Section, those stated in the
advertisement for bids, and those required on the bid form shall
not be considered as informalities and shall not be waived by any
public entity." That does not leave much that can be waived,
although a court recently held that "a public entity may waive
deviations that are not substantive in nature." Boh Bros. v. DOTD,
1st Cir. 1997) 698 So.2d 675.

This is a bad decision and is likely to lead to additional
limits on discretion by new legislation.

Withdrawal of Bids:

a
bid may be withdrawn by the bidder because of
"patently obvious, unintentional and substantial mechanical,
clerical, or mathematical errors, or errors of unintentional
omission of a substantial of work, labor, materials or
services...” but only if done
by affidavit within
48 hours of bid opening. The very specific
requirements of R. S. 38:2214C must be complied with to avoid
violation of the constitutional prohibition against giving away
public property.

Cancellation of a Solicitation:

a bid solicitation may be canceled by the public entity once
bids are opened
only for “just cause”. 38:2214
provides illustrations of some reasons for public works. The
recent Rosenbush case (653 So.2d 538, La. Supreme Court, 1995)
limits these options with this holding:

Thepresent LSA-R.S. 38:2214 and 38:2215 should be
interpreted together to provide that a public entity has 30 days
to do one of the following: (1) award a contract to the lowest
responsible bidder; (2) reject all bids for just cause; or (3)
extend the deadline by mutual consent with the lowest responsible
bidder. In the present case the City did none of these. Since the
City failed to comply with its obligation to award the contract
within the 30 day period, a mandamus action to compel the public
entity to award the contract to the lowest qualified bidder was
justified. At this point, the City could not avoid its
ministerial duty by trying to change the basis of the contract
from “administrative services” to “professional
services” and readvertise for bids; the 30 day period in
LSA-R.S. 38:2215 had already expired; it was simply too late.

Bid Bonds and Performance Bonds:

The surety for either bid or performance bond must be on
US Treasury list or be a Louisiana domiciled
company with at least an "A-"
Best rating. This is to help assure that you have
a solvent surety if your contractor fails to perform.

All Public Works Contracts in Excess of $5,000 must Be
Reduced to Writing and Recorded with the Clerk of Court.

All public works contracts in excess of $25,000 must have a
performance/payment bond for at least 50% of the contract amount.
You may choose to require a performance/payment bond on jobs
under $25,000. (Note: Contract limit changed in 1999 Regular
Session of the Louisiana Legislature from $100,000 to
$25,000)

Bonds, once given to the public entity, are a
property right of the public and the failure to
execute on a bond according to its terms is a gift of public
property in contravention of the Louisiana Constitution.

Responsibility and Responsiveness:

Responsibility deals with whether the bidder is
someone with whom you want to do businessare they solvent,
licensed, equipped; have they performed satisfactorily for you
and for others in the past.

Responsiveness deals with whether the bidder has
offered you what you asked for.

The decision in the
Haughton Elevator case, 367 So.2d 86, La.
Supreme Court, 1979, and R.S. 38:2212J require that when a public
entity challenges the responsibility of a bidder, an opportunity
for a
due process hearing must be provided.

An unresponsive low bidder must be given timely notice of the
reason the bid was found to be unresponsive, but no hearing is
required.

The failure to attend a
mandatory pre-bid conference is grounds for
disqualification of a bidder. However, notice that there will be
a mandatory pre-bid conference must now be included in the
advertisement for bids.

Preferences:

We no longer have an outright preference provision in our law
for
public works contracts. R.S. 38:2225 does not
require that if an out of state bidder is low, a Louisiana bidder
may be given the job if the home state of the out-of-state bidder
gives him a preference in his own state, and the Louisiana bidder
is within the margin of that state’s preference for its own
state bidders. This is referred to as a
reciprocal preference.

Preferences for
purchases appear in R.S. 38:2251-2261. The
primary statute is Sec. 2251 which provides that for
foodstuffs and paper a public entity must grant
to a bidder offering a product grown, manufactured, processed,
produced or assembled in Louisiana a 7% price advantage over
products which are not grown, manufactured, processed, produced
or assembled in Louisiana. This is
mandatory.

With regard to
all products other than foodstuffs and paper,
the public entity may choose to allow a bidder offering a product
manufactured, processed, produced or assembled within Louisiana,
whose price is within 5% of the low bid price, to receive the
award if the vendor of the Louisiana product is willing to
provide it
at the low bid price. This is
optional.

This is not a true preference, but gives a
vendor offering Louisiana products a “second bite” for
the contract award.

Illegal Procurement Practices:

R.S. 38:2220 provides that any contract subject to the Public
Bid Law and entered into without complying with the Public Bid
Law is
null and void. This should be enough cause for
alarm to both the vendor and the public entity.

The
District Attorney and the Attorney General are
given "
surveillance authority" and the right to bring
enforcement actions for breaches of the Public Bid Law and to
seek injunctions against violations. Any tax payer (usually a
disgruntled bidder) may also seek injunctions and other
appropriate actions to nullify violations.

When the DA or AG seeks enforcement actions, the court may
award a
civil penalty of up to $50,000 against public
officials who authorized the violation.

Several recent court decisions indicate that an aggrieved
party
must file suit for injunction in a timely
fashion once he knows of or should have known of facts
supporting a violation of the law. One can’t wait until the
contract has been performed and then say that the award should
have been made to someone else and now claim lost profits, etc.
for a bidder who did not get the contract.

When a court finds that a contractor improperly awarded a
contract
acted in good faith, the contractor will be
allowed quantum meruit, that is payment of his out of pocket
expenses, without profit or overhead. If the contractor was
not in good faith, having collaborated in what
was known to be an illegal award, he will not be allowed any
proceeds under the contract, and may be subject to a claim for
damages from the bidder who should have received the award.

Procurement Alternatives:

Purchases may be made from
state procurement contracts, which may be
available, without the necessity of bidding. R.S. 39:1702.

Under a provision of the Procurement code, R.S. 39:1710,
political subdivisions may buy items which are available on state
contract and buy from a local vendor. It must be precisely the
same item with the same specifications as the state contract
item. The local vendor may be paid 3% - 7% over state contract
price for handling and transportation and delivery. You may often
be able to buy the product at state contract price or below.

Purchasing can be done
jointly with other political subdivisions or
purchase can be made under an
available contract entered by another Louisiana public
entity. See R.S. 33:1321 and following.

Political subdivisions may adopt the
La. Procurement Code to govern their
procurement. Must still use the Public Bid Law for public
works.

Both Congress and the Louisiana Legislature enacted
legislation authorizing state and local government to purchase
off of federal
GSA contracts. However, the Republican congress
has halted this reform.